Skip to content 
Search

Latest Stories

Is Workmen Compensation Compulsory for All Firms?

One imperative of running a successful firm in India is to make sure your employees stay safe at work. There are certain businesses, such as factories, construction sites or mines, where the workforce is highly vulnerable to health, safety and life hazards. In case of any workplace accidents, the employer is typically held liable to pay compensation to the injured workers.

Imagine the financial loss that business owners face if workplace hazards were to occur frequently. This is where the need for worker or employee compensation insurance arises.


Some business owners misinterpret the importance of workmen’s compensation. They think they won’t need it because of the low risk of workplace hazards in their case.

If you are a business owner in India, you are legally responsible to provide workmen’s compensation as and when an unfortunate event occurs. Irrespective of the industry your business falls into, you must abide by the Workmen’s Compensation Act.

What is the Workmen's Compensation Act?

It is a legal act that aims to provide compensation to workers or their dependents in case of injury or accident arising during the employment tenure. This also includes occupational diseases, permanent disability, or death.  This act applies to every employee or employer in any capacity as specified in its Schedule II.

The amount of compensation that an employer is liable to pay in case of workplace accidents depends on the nature of the injury, age of the injured individual and his monthly earnings.

The Importance of Employee Compensation Insurance

As an employer, you can control the occurrence of workplace hazards to an extent. However, there is always the slight risk of unexpected accidents occurring at work. An employee compensation insurance policy safeguards all your employees against workplace injuries. It is a cost-effective way to deal with the significant expenses that may come up unexpectedly at any time during work hours.

As per law, it is mandatory for you to buy employee compensation insurance, even if you have hired only one worker in your firm. There are many advantages of purchasing this insurance policy.

  1. Medical Expense Coverage

A workplace injury can result in a small injury that needs simple treatment like a bandage, or a serious one like a bone fracture. Depending on the severity of the injury, you need to pay for the cost of medical treatment if you do not have an active employee compensation insurance plan.

However, you can avoid paying for these expenses by buying workmen’s compensation insurance policy. The chosen insurer will pay for medical treatment that employees need in case of workplace accidents.

  1. Legal Liability Coverage

Workplace accidents can become the cause of lawsuits filed against your firm for not maintaining safety in your office or factory.

Consider the case wherein an employee lost all the fingers of his hands while working in a manufacturing unit. His agitated family members then filed a lawsuit against the employer to get hefty compensation.

In such situations, hiring an expert lawyer is an expensive affair. But you need not worry about the defense cost if you have an employee compensation insurance policy. It will cover your legal liability against such accidents.

The employee compensation insurance policy also pays for the compensation awarded by the local labor court or other authorities.

  1. Tax Benefits

Just like group health insurance, the premium you pay for an employee compensation insurance policy is non-taxable. It means you can claim a tax deduction to reduce your tax liability.

As detailed above, employee compensation insurance is not just useful for some specific types of businesses, but for all businesses. In case you are unaware of the crucial points to consider before you buy this insurance policy, connect with good insurance brokers, like SecureNow. Their team will manage the various aspects related to the insurer, surveyor and TPA.

More For You

Bangladesh seeks US deal to shield garment industry from tariffs

Workers are engaged at their sewing stations in a garment factory in Savar, on the outskirts of Dhaka, on April 9, 2025. (Photo by MUNIR UZ ZAMAN/AFP via Getty Images)

Bangladesh seeks US deal to shield garment industry from tariffs

BANGLADESH, the world's second-biggest garment manufacturer, aims to strike a trade deal with the US before Donald Trump's punishing tariffs kick in next week, said the country's top commerce official.

Dhaka is proposing to buy Boeing planes and boost imports of US wheat, cotton and oil in a bid to reduce the trade deficit, which Trump used as the reason for imposing painful levies in his "Liberation Day" announcement.

Keep ReadingShow less
UK business district
The Canary Wharf business district including global financial institutions in London.
Getty Images

Bond yields ease following Starmer’s support for Reeves

THE COST of UK government borrowing fell on Thursday, partially reversing the rise seen after Chancellor Rachel Reeves became emotional during Prime Minister’s Questions.

The yield on 10-year government bonds dropped to 4.55 per cent, down from 4.61 per cent the previous day. The pound also recovered slightly to $1.3668 (around £1.00), though it did not regain all its earlier losses.

Keep ReadingShow less
modi-trump-getty
Modi shakes hands with Trump before a meeting at Hyderabad House in New Delhi on February 25, 2020. (Photo: Getty Images)
Getty Images

Indian exporters watch closely as Trump says trade deal with India likely

THE US could reach a trade deal with India that would help American companies compete more easily in the Indian market and reduce tariff rates, President Donald Trump said on Tuesday. However, he cast doubt on a similar deal with Japan.

Speaking to reporters on Air Force One, Trump said he believed India was ready to lower trade barriers, potentially paving the way for an agreement that would avoid the 26 per cent tariff rate he had announced on April 2 and paused until July 9.

Keep ReadingShow less
Kolhapuri sandal sales surge in India post Prada controversy

Customers shop for 'Kolhapuri' sandals, an Indian ethnic footwear, at a store in New Delhi, India, June 27, 2025. REUTERS/Adnan Abidi

Kolhapuri sandal sales surge in India post Prada controversy

INDIAN footwear sellers and artisans are tapping into nationalist pride stoked by the Prada 'sandal scandal' in a bid to boost sales of ethnic slippers with history dating back to the 12th century, raising hopes of reviving a struggling craft.

Sales are surging over the past week for the 'Kolhapuri' sandals that have garnered global attention after Prada sparked a controversy by showcasing similar designs in Milan, without initially crediting the footwear's origins.

Keep ReadingShow less
UK business district
The Canary Wharf business district including global financial institutions in London.
Getty Images

Economy grew 0.7 per cent in Q1 2025, fastest in a year

THE UK economy expanded at its fastest pace in a year during the first quarter of 2025, driven by a rise in home purchases ahead of a tax deadline and higher manufacturing output before the introduction of new US import tariffs.

Gross domestic product rose by 0.7 per cent in the January-to-March period, the Office for National Statistics (ONS) said, confirming its earlier estimate. This was the strongest quarterly growth since the first quarter of 2024.

Keep ReadingShow less